United Utilities ends Nortel joint venture

United Utilities (UU) has pulled the plug on its joint venture with Nortel Networks which aimed to deliver high-speed data transfer services over ordinary power cables.

The digital powerline (DPL) technology, was announced with great fanfare in October 1997 and looked set to transform the networking market.

In July 1998, Mark Ballett, managing director of UU subsidiary, Norweb Communications, told Silicon.com he believed that Web access and voice services over electricity lines would be a reality by the end of the year (http://www.silicon.com/a22038 ).

But, speaking to Silicon.com yesterday, Ballett said that as a customer and subsidiary of UU, his company was looking forward to the benefits of DPL technology but only if it presented a "viable business offering".

In a statement, UU said that despite the potential of DPL technology, "the projected volumes and profitability within the market are considered to be insufficient to justify the investment required."

Robin Duke-Woolley, principal analyst at Schema, supported the move. Having to reach the standard required, creating a high-frequency path through wires, he said: "Problems from increased competition, such as cable modems and DSL, is driving prices down which then drives up the amount of capital investment required".